Contrarian Alert: First Solar Rising From the Grave

Will First Solar climb to $34?

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The bull train has hit a few bumps in recent trading sessions as a wave of European woes over the weekend has prompted some to take profit. Nonetheless, "buying on the dip" remains a dominant theme on Wall Street as bullish pressures continue to reign supreme on the equity front.

With most equities either sitting at or headed towards new highs, many are faced with the tough decision of waiting to pull the sell trigger in an effort to maximize profit without getting burned by the impending correction. Luckily, the investable universe is wide and not every security has taken advantage of the bull run on Wall Street. Green-energy bellwether First Solar (NASDAQ:FSLR) presents an intriguing opportunity at the moment that warrants a closer look from contrarian investors looking to get a piece of the action on Wall Street.

Chart Analysis

First Solar has likely been overlooked by most investors amid the ongoing rally in the stock market as this once-hot stock has been absolutely battered down since peaking in 2008. With green energy euphoria seemingly evaporating over the past few years amid fears of slowing global growth, it shouldn't be much of a surprise to see shares of First Solar down in the dumps. Since peaking at $317 a share in May of 2008, this stock has been either sliding lower or trading sideways until recently hitting an all-time low of $11.43 a share on June 4, 2012. Contrarian investors will, however, likely be impressed by its price action since bottoming out; notice in the chart how First Solar has been steadily climbing along a rising support level (blue line) since June of last year.

Click to enlarge

Another piece of bullish evidence is that First Solar has managed to hold above the $26 level (red line) over the last two weeks; this is noteworthy because the stock had previously made multiple attempts at conquering this resistance level, suggesting it is now the new support level.

Outlook

If the technical pattern at hand holds true, First Solar should rebound higher over the coming weeks and resume its slow and steady rise from the grave. From a technical perspective, this stock has major support around $26 a share followed by the $20 level; in terms of upside, First Solar could encounter selling pressures when it nears the $34 level. As always, investors of all experience levels are advised to use stop-loss orders and practice disciplined profit-taking techniques.